Similar to executive pay increases and bank executive bonuses which are now under scrutiny by shareholders while the rest of the world are tightening their belts, fund managers in Australia are under pressure from the industry and stakeholders to disclose their pay.

The sector is estimated to receive $9.4 billion in revenue from super fund members for the current financial year. Some groups want the transparency on pay in managing Australia's superannuation savings to be a part of a series of reforms underway in the $1.3-trillion super system.

The Financial Services Council (FSC) released the superannuation corporate governance policy which makes it compulsory for member-firms from both retail and corporate superannuation sectors to meet the highest benchmarks of transparency and governance.

The standard exceeds what is required by current Australian laws and the Australian Prudential Regulation Authority's new standards to be introduced in 2013. It would also make it mandatory to have a majority of independent directors and chairman, a prohibition on conflicted directorships and mandatory policies on proxy voting and environmental, social and government issues. The board would need to have a majority of independent directors.

However, the FSC excluded a compulsory disclosure of fund manager' pay. FSC Chief Executive John Brogden said what is more relevant for members of superfunds are the fees members paid for their investments which are included in disclosure and annual statements. He stressed pay of fund managers are proprietary information which could have adverse consequences on a company's commercial position if it would be disclosed publicly.

The top fund Aussie fund managers earn from $500,000 annually and more with incentive schemes and dividends as part of their compensation package.

"As a fund, you would want to know what the executives are being paid and whether are they aligned to you, the super fund," Australian Institute of Super Trustees Chief Executive Fiona Reynolds was quoted by The Sydney Morning Herald.

"If you are a super fund looking at long-term returns, you don't necessarily just want to see your manager being rewarded for short-term gains," she added.

Experts forecast the fund management industry in Australia to increase revenues by 2.2 per cent for the current financial year to $9.4 billion.

Some retail funds have already complied with the new standards, while others have selected to keep the status quo. Due to the funds' clear legislative mandate to operate only for the provision of retirement benefits for members, having an independent board removes the potential for real or perceived conflicts. Included in the reforms is the ban on multiple directorships and for a member to sit on the board of two competing super funds.

To indicate the growing shareholder disenchantment with excessive executive pay, in 2011 about 12 per cent of ASX300 companies were punished by stockholders under the two strikes rule on executive pay.

"If you want to complete the system in terms of transparency, there's a lot more to do.... You cannot expect corporate Australia to carry the burden for greater transparency without being open to the same sort of transparency. It just makes no sense," The Sydney Morning Herald quoted former leading fund manager Peter Morgan.

"If it's good enough for big companies, then the argument is that it's good for investment managers as well. Everything that ensures disclosure in financial services is good for consumers," added SuperRatings Chief Executive Jeff Bresnahan.